Wednesday, September 20, 2017

Making America Great: Idaho Potatoes And North Dakota Wheat -- September 20, 2017

Words I love seeing in the same paragraph:
dollars millions North Dakota wheat Taiwan
From Great Falls Tribune:
Taiwan has once again agreed to purchase a large share of U.S. wheat over the next two years, with most of it coming from Idaho, North Dakota and Montana.
Idaho Gov. C.L. “Butch” Otter and Taiwanese milling industry officials signed the $576 million agreement Wednesday at the Idaho Capitol in Boise. That totals 1.8 million metric tons of U.S. wheat in 2018 and 2019 combined.
According to the Idaho Wheat Commission, Taiwan mostly buys Idaho’s soft white wheat to use in cookies, crackers and noodles. However, Taiwan has also been buying more of the state’s hard red wheat to use in bread.
This is the 11th time leaders with the Taiwan Flour Millers Association — which imports wheat on behalf of all 20 Taiwanese flour mills — have pledged to buy U.S. wheat.
The United States supplies more than 80 percent of Taiwan’s total wheat imports each year.

Fourteen Renewed Permits; Five New Permits; MRO Reports Six Huge Completed DUCs -- September 20, 2017

Note: yesterday I posted that we might see some activity in the Wadholm area. Today, of all things, MRO reported #31475 and #31476 as reported DUCs.

Active rigs:

Active Rigs553267196182

Five new permits:
  • Operator: Oasis
  • Field: Banks (McKenzie)
  • Comments: Oasis has permits for a 5-well Aagvik pad in SWSW 35-152-98 -- see below --

Producing wells:
  • 18249, 702, Oasis, Lundeen 4-26H, Banks, t6/10; cum 205K 7/17; typical Bakken decline; ready for work-over or mini-re-frack;
  • 17986, 501, Oasis, Aagvik 1-35H, Banks, t12/09; cum 174K 7/17; typical Bakken decline; ready for work-over or mini-re-frack;
  • 17472, 593, Oasis, Mildred Nelson 4-25H, Banks, t6/09; cum 111K 7/17; typical Bakken decline; ready for work-over or mini-re-frack;
  • 17387, 203, XTO, Nygard 16-36H, Banks, t12/09; cum 87K 7/17; never was a good well; typical Bakken decline; something needs to be done;
Fourteen permits renewed:
  • Petroshale (10): ten Petroshale permits all NENW/NWNE 17-152-94, McKenzie County (see graphic below)
  • CLR (4): four Hereford Federal permits in McKenzie County
Six producing wells (DUCs) reported as completed:
  • 31475, 2,486, MRO, Lacey USA 11-5H, Van Hook, 4 sections, t7/17; cum 17K over 11 days; see note above;
  • 31476, 2,613, MRO, Moline 14-32H, Big Bend, 4 sections, t8/17; cum 3K over 7 days; (#24010)
  • 32455, 4,912, MRO, Cunningham USA 31-4H, Antelope, Sanish, t8/17; cum 11K over 6 days; (#19473)
  • 32454, 3,726, MRO, Garness USA 31-4TFH-2B, Antelope, Sanish, t7/17; cum 28K over 17 days; (#19473)
  • 32453, 3,396, MRO, Marcella USA 21-4TFH, Antelope, Sanish, t7/17; cum 16K over 11 days; (#19473)
  • 32452, 3,004, MRO, Grady USA 21-4H, Antelope, Sanish, t8/17; cum --; (#19473)
APIs for these MRO wells:
  • 31475:33-061-03754;
  • 31476: 33-061-03755;
  • 32455: 33-053-07475;
  • 32454: 33-053-07474;
  • 32453: 33-053-07473;
  • 32452: 33-053-07472;
See renewed Petroshale permits above:

Racking And Stacking The Various Oil And Gas Plays -- September 20, 1027

From Platts, source:

Oh, Happy Day! 

I'm making progress on Dracula, and two books arrived from Amazon today:
I bought the latter for my wife who loves pastels and is a member of the southwest pastel club.  No caps because I don't know the formal name of the club. The book is one of those huge coffee table art catalogues that no one really reads but pages through it looking at the paintings. Sort of like those who subscribe to The New Yorker. They no longer read the The New Yorker for the articles; they pick up the magazine to read the cartoons. The current issue of The New Yorker is more tedious than usual.

Mixed Messages?


September 22, 2017: What a nut case. On Friday, September 22, 2017, the numerologist says he was wrong. World won't end tomorrow (Saturday).

Original Post 
Christian numerologist: the earth will end this Saturday, September 23, 2017.

The reporter who posted this story noted this on twitter:

A More In-Depth Look At NP Resources' Permits For A 6-Well Pad In Cinnamon Creek, McKenzie County -- September 20, 2017

When I think of Meridian, I think:
  • pioneer in the oil industry in general, and in North Dakota, specifically
  • pioneer in directional / horizontal drilling
  • subsidiary of BR
  • pioneer in water injection (before sand was added to the mix)
Previous posts regarding Meridian Oil which provides some background to the post below:

A reader asked about the six NP Resources permits for a Trotter Federal / Trotter State pad in the southwest corner of McKenzie County, right at the junction of Golden Valley, Billings, and McKenzie counties.

As the reader noted, this is not considered a "good" spot for targeting the Bakken.

From the "heat map" post, here is where the proposed NP Trotter pad will be. Because the map is small, it's hard to get it exactly right, but the pad appears to be in one of the least promising areas of the Bakken.

Here is what the area looks like from the NDIC perspective:

Producing wells and one producing well now permanently abandoned:
  • 13301, 458, White Rock Oil & Gas, Rough Rider Trotter 31-26H, Rough Rider, t2/92; cum 303K 7/17;
  • 13150, 116, White Rock Oil & Gas, Rough Rider 44-23H, Rough Rider, t5/92; cum 158K 7/17;
  • 13379, 184, Petro-Hunt, Cinnamon Creek 44-27H, Cinnamon Creek, t8/92; cum 160K 7/17;
  • 13569, 265, Petro-Hunt, Cinnamon Creek 22-12H, Cinnamon Creek, t11/93; cum 186K 7/17;
  • 13051, 197, White Rock Oil & Gas, Rough Rider 31-19H, Rough Rider, t9/92; cum 196K 7/17;
  • 12981, PA/75, BR, Rough Rider Federal 44-30H, Rough Rider, t11/90; cum 40K 7/17;
  • I didn't check all of them, but the ones I did check were drilled by Meridian Oil Company
  • they are defined as horizontal wells 
  • it was hard to say for sure, but I believe none of these wells were "fracked"
  • they were fairly short laterals
To answer the reader with his question re: NP Resources drilling in this area:
  • hope springs eternal
  • with new technology and better understanding of the Bakken, NP Resources may do better than expected
  • I think it's fascinating -- what surprises me most is that NP Resources did not seek a single permit or widely spaced six permits, but six permits on one pad in a area not considered a great location
  • I have no idea what NP geologists must have found; should be interesting to follow, but consider this: with short laterals and no fracking, and old understanding of the geology, the one well in this section has produced 300,000 bbls of oil -- it's taken a long time, but it's as good as many older Red River or Madison wells; one has to remember how little NP probably paid for these mineral rights and the lease, I assume, is HBP of the currently producing well -- but this goes beyond my comfort zone 

Weekly Petroleum Report -- September 20, 2017

Weekly petroleum report, highlights.

Re-balancing: 46 weeks.
  • crude oil inventories increased by 4.6 million bbls from the previous week
  • at 472.8 million bbls, US crude oil inventories are in the upper half of the average range for this time of year; two points to consider:
  • number of years to determine the average not stated
  • the huge glut of crude oil inventories since 2014 have skewed the average upwards
  • gasoline inventories decreased 2.1 million bbls, but gasoline also remains in the upper half of the average range;
  • gasoline supplied: average 9.5 million bbls per over the past four weeks
  • distillate fuel product was up 14.5% from the same period last year 
  • refinery operating capacity clawing back from a recent low of 79% to 83% this past week
  • gasoline production continues to decrease on a weekly basis while distillate fuel production is increasing
  • US crude oil imports increased by almost one million bopd (actual: 888,000 bopd)
Gasoline demand graph will be posted by the EIA tomorrow.

Following the report, the price of WTI did not change. It is currently at $50.15 (9:50 a.m. Central Time, September 20, 2017) which was about where futures were before the market opened earlier today.

Note: how I calculate the number of weeks to "re-balance" is discussed at this post, near the bottom of that post. As usual, the usual disclaimer applies: I often make simple math errors.

Re-Balancing Back Up To Nearly A Year -- 46 Weeks, To Be Specific -- September 20, 2017

Link here.


Weeks to RB
Week 0
Apr 26, 2017

Week 1
May 3, 2017
Week 2
May 10, 2017
Week 3
May 17, 2017
Week 4
May 24, 2017
Week 5
May 31, 2017
Week 6
June 7, 2017
Week 7
June 14, 2017
Week 8
June 21, 2017
Week 9
June 28, 2017
Week 10
July 6, 2017
Week 11
July 12, 2017
Week 12
July 19, 2017
Week 13
July 26, 2017
Week 14
August 2, 2017
Week 15
August 9, 2017
Week 16
August 16, 2017
Week 17
August 23, 2017
Week 18
August 30, 2017
Week 19
September 7, 2017
Week 20
September 13, 2017
Week 21
September 20, 2017

Crude oil inventories increased for the third week in a row which means that re-balancing will take longer, now extending out to 46 weeks, which, for all practical purposes, is another year.

That explains why OPEC is currently "mulling" extending deeper cuts to the end of 2018. No link but the story is out there.

WTI Back To $50 -- Looks Like It Might Hold Today -- September 20, 2017

Active rigs:

Active Rigs553267196182

RBN Energy: natural as producers boost their already bold 2017 production outlook.
An analysis of mid-year 2017 guidance shows that the nine natural gas-focused exploration and production companies we’ve been tracking are still fully committed to the very aggressive exploration and development spending they outlined at the beginning of the year. These Gas-Weighted E&Ps slightly upped their total 2017 capital budgets to $8.87 billion, a whopping 59% boost from their 2016 investment — well above the 44% and 29% increases announced by the Oil-Weighted and Diversified E&P peer groups, respectively. The gas-focused producers also increased their 2017 production guidance by 1% to 1.046 billion barrels of oil equivalent (Bboe), in contrast to the mid-year reductions in 2017 output announced by the other two peer groups. Today, we continue our review of updated capital spending plans by 43 U.S.-based E&Ps, this time with a look at companies that focus on natural gas.
EQT is boosting its organic capex by 66% in 2017, but this significant spending is dwarfed by its merger-and-acquisition dealmaking. The company spent $1.7 billion in 2016 and early 2017 adding acreage in its core southwestern Pennsylvania/northern West Virginia production area before announcing the blockbuster $8.2 billion purchase of Rice Energy in June 2017. The EQT/Rice transaction, the largest corporate E&P deal in the U.S. since 2012, will increase EQT’s production by 59% and make it the largest U.S. natural gas producer. The Rice purchase significantly increases EQT’s contiguous acreage in its core areas, expanding opportunities for the longer lateral drilling that will boost the company’s organic output by 13% this year.
Illinois: unpaid bill backlog hits a record $16 billion